The letter of credit is issued for transactions, and bank guarantee is issued for transactions.

domestic

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financial

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international

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government

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Solution

The correct option is C international
The letter of credit is issued in case of international transactions, whereas bank guarantees are provided in case of domestic transactions like real estate contracts or infrastructure projects.

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S.N	Transactions	Time Gap	Errors made by business / bank
1 2 3 4 5	Cheque issued to customer but not presented for payment. Cheque amounting to Rs.5,000 issued to M/s XYZ but recorded as Rs.500 in the cash book. Interest credited by the bank but not yet recorded in the cash book. Cheque deposited into the bank but not yet collected by the bank. Bank charges debited to firm's current account by the bank.

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